HOLLAND, MI – Macatawa Bank Corp. announced it has removed a roadblock for future dividends to its shareholders on Monday, Jan. 6 when the bank holding company announced it exchanged all of its preferred stock for common shares on Dec. 30, 2013.

The exchange, which gives the preferred shareholders the equivalent of $5.25 per common share, removes preferred shares sold to Amway Corp. scion David Van Andel’s White Bay Capital LLLP in 2008 for $20 million.

The bank was struggling with heavy losses in the local housing market when it sold the shares to raise cash.

“This is an important event for the company,” said Macatawa Chairman Richard L. Postma in a news release issued by the company.

“When I assumed the position of chairman four years ago during a troubled time, the company had already issued the Preferred Series A and B with dividend rates of 12 percent and 9 percent, respectively. Shortly thereafter, the company, under regulatory order, suspended all dividends on the preferred stock,” Postma said.

“Now that the company has returned to a normal regulatory operating environment, the existence of the preferred stock was an impediment to restoring dividends to common shareholders,” the statement said.

“At the same time, the company is thankful to those individuals who took a significant risk at the time of the issuance of the preferred stock and therefore, the Board of Directors determined that the exchange into common stock at the above market price of $5.25 plus the one-time cash payments, which approximated a 5.0 percent and 4.5 percent dividend rate for Preferred A and B, respectively, after considering previous dividends paid, were appropriate and fair terms,” the statement said.

Although the transactions will have no impact on the company’s bottom line, it will affect earnings-per-share calculations for common stock shareholders, the company said. Those impacts will be disclosed later this month when Macatawa announces its fourth quarter and year-end earnings for 2013.

Macatawa’s stock was trading at $4.91 per share, down 9 cents, or 1.8 percent, at noon on Monday, Jan. 6.